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The Novonix Ltd (ASX: NVX) share price is rocketing higher, up 11% in morning trade.
The lithium-ion battery tech company emerged from yesterday’s trading halt this morning following twin ASX announcements.
We look at those below.
What did Novonix announce?
The Novonix share price was frozen yesterday at the company’s request pending a capital raise announcement today.
That announcement, along with a separate release detailing the reasons for the share issues – spoiler alert, it relates to a strategic investment in the company by United States energy giant Phillips 66 (NYSE: PSX) – was released this morning.
First, the capital raise.
According to the release Novonix plans to issue 77,962,578 ordinary shares for a cash consideration, priced in US dollars. The new shares will be issued for US$1.924 or AU$2.600 per share at company’s calculated exchange rate.
The Novonix share price opened closed on Friday at $3.02.
Shareholder approval is still required, with Novonix estimating the date for that determination as 30 August. Should shareholders approve, the proposed issue date is 5 October.
As for the purpose for issuing the securities, the company revealed that Phillips 66 has agreed to purchase all the shares:
Phillips 66’s investment will provide Novonix with the capital needed to support growth and ongoing R&D as the group continue to scale synthetic graphite production and develop new technologies for higher-performance energy storage applications.
Phillip’s investment highlights
Phillips reported it has entered into an agreement to acquire a 16% stake in Novonix. It said this investment will support its development of an entirely domestic supply chain for the growing US electric vehicle (EV) market and other energy storage systems.
Commenting on the investment, Greg Garland, CEO of Phillips 66 said:
This strategic investment enables Phillips 66 to directly support the development of the US battery supply chain. It advances our commitment to pursue lower-carbon solutions while leveraging our leadership position and expertise in the specialty coke market and supporting Novonix’s emerging position in US-based anode production.
Novonix’s CEO Chris Burns commented:
We’re excited by Phillips 66’s vision for a sustainable future and confidence in our business plan and management team. Phillips 66’s investment will provide us with the capital needed to support growth and ongoing R&D as we continue to scale our synthetic graphite production and develop new technologies for higher-performance energy storage applications.
Phillips 66 will subscribe for all the 77,962,578 ordinary shares detailed above for a total of US$150 million.
Phillips 66 will nominate 1 director to Novonix’s Board of Directors.
Novonix share price snapshot
The Novonix share price has gained 147% over the past 12 months, racing past the 25% gains posted by the All Ordinaries Index (ASX: XAO).
Year-to-date the Novonix share price is up 155%.
Should you invest $1,000 in Novonix right now?
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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.